414s Comp and ADP/ACP Tests

[zimbo]

I have a 401K plan that does NOT include bonuses or commissions in the comp definition for purposes of deferrals or employer matches (The match is capped at 6% of comp using the comp definition above). There are no Profit Sharing contributions.

When I ran the ADP/ACP Tests using a "safe harbor" definition of total comp under 1.414(s), the ADP failed (the ACP Passed) and the employer agreed to contribute QNECs calculated based on total comp at a level that would make the test pass.

In this instance, is it also necessary to run a separate non discrimination test under 1.414(s)-1(d) or does the passing of the ADP/ACP tests using Total Comp. render the 414s test unnecessary?

[MWeddell]

It is not necessary to run a 414(s) test for the plan's definition of compensation in your situation.

If you have access to the 1992 Enrolled Actuaries gray book, you might want to read Q&A 40 for confirmation of this.